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BREAK FREE FROM THE

PRODUCT LIFE CYCLE


by Youngme Moon

Group Members:
Muhammad Talha [17249]
Muhammad Rafi Raza [17876]
Hassan Bin Adnan [17590]
Qaseem Zaidi [17560]

PRODUCT LIFE CYCLE

BREAK FREE FROM THE PRODUCT


LIFE CYCLE

Theodore Levitt introduced the concept of the product life cycle in


1965

Companies tend to adopt similar positioning approaches for products


and services during each of the life cycle stages

Competitive relax to augment products as they mature

The augmented product becomes the expected product, so it must


be further enhanced to remain competitive

By positioning or repositioning , companies can change how


customers categories them, as a result, companies can rescue
products foundering in the maturity phase of their life cycles and
return them to the growth phase

Positioning
Strategy

Reverse
positionin
g

By stripping away
attributes
consumers expect
in a mature
product and adding
some surprising
new ones

Breakaway
Positioning

By combining
features of
products in
distinctly different
categories

Stealth
Positionin
g

By associating a
tainted product
with a category
consumers
embrace

Reverse Positioning

Assumes that although consumers do want something more than the


baseline product , they dont necessarily want an endless parade of
new features

Once a product is returned to its baseline state, reverse positioners


supplement the stripped down product with one or more carefully
selected attributes that would typically found in a highly augmented
product

This combination of attributes allow the product:

to assume a new competitive position within the category


move backwards from maturity into a growth position on the life
cycle curve

IKEA

IKEA has long been celebrated in the business


press for its innovative marketing and
phenomenal growth

Cheap and stylish inventory

Top stores compete by carrying enormous and varied


inventories

Key factor in the stores high performance is its brilliant


reverse positioning

No in- store sales assistance

Limited Variety

IKEA STORE
(before
reverse
positioning)

No Delivery Option

Most of the furniture require


assembly

Durability is not to be
expected

Stores have an airy,


ultramodern look

IKEA STORE
(After
reverse
positioning)

Company operated day care


center for children

Customers can stop for


lunch at a delightful cafe

Customers can purchase


items besides furniture like
toys and house wares

Benefits for IKEA

IKEA has become the 7th largest furniture stores in the U.S.

It has doubled its market share, and

tripled its U.S. sales from $600mn to


$1.7 bn over the past 8 years

Commerce Bank

Serving New Jersey, Delaware, New York and Metropolitan Philadelphia

Pays the lowest interest rate in its market

Offers a limited product line- just for checking accounts

Hence Commerce bank reverse positioned itself as the most


convenient bank in America

Growth between 1999 to 2004:

Expanded branches from 120 to 319

Deposits from $5.6 bn to $27.7 bn

Loans from $3 bn to $9.4 bn

Open 7 days in a week


including evenings

Commerce
Bank
(After
reverse
positioning)

Customers can get a debit


card while waiting
An escort with an umbrella
to car
while raining

Free coffee and news papers

Free coin counting penny


arcade machines that
customer loves

Benefits for Commerce Bank

In 2004, commerce bank opened 1.1 million new customer


accounts.

JET BLUE

In December 2004 JetBlue celebrated its 16th consecutive


profitable quarter

A 26.8% increase in operating revenue($1.27 billion) over


previous year

By offering :

cheap seats and a lean value proposition

no meals

no round trip fares

no first class seating

JetBlue
(After
reverse
positioning)

Leather seats

High- end personal


entertainment systems
with satellite television

Extra leg room in


the back two
-thirds of the
plane

Benefits for JetBlue

Establish a unique position in the market and steal shares from


less creative competitors

Successfully appeals to customers among segments from


college students to business executives

Breakaway Positioning

Through breakaway positioning ,a product escapes its category by


deliberately associating with a new one.

By manipulating the marketing mix a firm can change the way the
customers frame a product , therefore the way they respond to it.

A
breakaway product instead of being framed as simply an
alternative to others in its category, customers perceive it as
altogether different product.

This strategy allows the product to shift backward on the life cycle
curve, moving from doldrums of maturity into a thriving growth
opportunity.

Swatch
Earlier strategy

Breakaway change

1.Swiss watches were


marketed as a form of jewelry
2.They were serious, enduring,
expensive and discreetly
promoted.

1.Playful fashion
accessories.
2.They were fun, ephemeral,
inexpensive and showily
promoted.

Customer bought it once and it Inspired impulse buying:


lasted life time.
customer often purchased half
a dozen in different designs

FROM:
High
end
jewelry

TO:
Fashion
Accessor
ies
Category

Swatch
became
the best
selling
wristwatch
of all time

The Simpsons
o

The fox network has done a breakaway positioning when it launched its
animated series The Simpsons in 1989.

Although cartoons appeared in evening TV in the 1960s,no network had


created a cartoon for adults and placed it in prime time.

The Simpsons success was due to its ability to break away from its
presumed category(cartoons) and associating itself with an entirely
different category Adult prime time sitcom.

The Simpsonss breakaway positioning has had an important impact on


its progress along the life cycle.

EZ Squirt ketchup

Stealth Positioning
Stealth positioning conceal the true nature of their products by
affiliating them with a different category.
Skeptical Thinking .
You may have a great product, but the category turns off potential
customers.
By using stealth positioning, companies can, in effect, sneak products
into the market and gain acceptance that might otherwise prove
elusive.
stealth positioning and deceit.

EyeToy :Play
Sony's goal is to make the PlayStation a broad platform for
home entertainment and communications
Error of Perception.
A video camera (the EyeToy) and game software (called Play)
that plugged into the new PlayStation 2 console.
Selling of more than 2.5 million units in its first seven months.
They wanted to establish the EyeToy hardware in people's
minds as a plaything rather than a scary communications
device

AIBO
Similar stealth strategy for household robot category.
Sony positioned the product as a lovable but otherwise useless
pet.
Market test of a flawed technology.
Sony gathered invaluable consumer feedback to guide
continued development of its robots.
Next-generation robot :QRIO.

Mac Mini
The Mini is a minimalist aluminum box, six inches square and
two inches tall.

Downplaying its PC capability.


Music server for car
Dedicated Internet port for the kitchen.
Mobile recording studio for the band.
Backup device for photos.
TiVo-like recorder.
Digital entertainment hub for the living room.

Popularity of Windows-based PCs.


Overpriced Apple Computers

Apple Mac Mini Starting at $599

2X Faster
Processor

Connectivity

2X Faster
Graphics

B.Y.O.D.K.M.

Fast, Flexible
Thunderbolt
I/O

Storage &
Memory

Thunderbolt Display